Start-ups may be ineligible for SBLF funds

With employment rates remaining flat and the job market getting tighter, some folks are thinking of going into business for themselves, but "newbie" entrepreneurs with good ideas and little track record may still have a hard time securing financing. Start-ups may not even be eligible for $767 million recently given out to Main Street community banks by the Treasury Department in an attempt to jump start small business ventures and create jobs.

Charles A. Beard, President and CEO of Commercial Banking Company (CBC), says to his knowledge his bank is the first in Georgia to receive funds from the U.S. Treasury Department's Small Business Lending Fund (SBLF), and he urges small businesses to apply. CBC is part of Lowndes Bancshares, Inc. of Valdosta, Ga. which has received $6 million to loan small businesses.

"We are making these funds available to businesses in our local communities which are defined as Lowndes and Colquitt counties. The purpose of the SBLF is to facilitate banks making loans available to small businesses, and that is our intent." Beard said his bank prides itself on relationships and tends not to lend outside the market or to people they do not know who cannot be serviced on an ongoing basis. (Photo from CBC website)

Beard said funding categories for SBLF loans include owner occupied commercial real estate (attorney and doctor's offices, grocery stores, etc.), commercial or industrial loans which are basically small businesses needing more capital, or agricultural related businesses.

"We already have some customers in the pipeline who are eligible for the funds." Beard said he is not doing any advertising and will be delivering information about the funding by way of bank loan officers. Beard said this funding is more applicable to existing small business customers who are continuing to grow, expand, and maintain their businesses as opposed to start-ups.

"It's getting harder and harder to deal with banks because of adequacy of capital and cost of funds." Beard said that having customers in the pipeline makes it easier to accommodate existing customer's needs.

The SBLF is one part of the Obama Administration’s comprehensive agenda to help small businesses access the capital they need to invest and hire. The State Small Business Credit Initiative (SSBCI), which is also a key part of the Small Business Jobs Act, allocates $1.5 billion to new and existing state programs that will leverage private financing to spur $15 billion in new lending to small businesses and small manufacturers.

According to the SPLF website, the Fund encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion. Through the Small Business Lending Fund, Main Street banks and small businesses can work together to help create jobs and promote economic growth in local communities across the nation.

"Ninety-five percent of the funds that will be made available are still open for discussion." Beard advises those wishing to apply to have a business plan in hand to submit to a loan officer. For more eligibility requirements to participate in the Lowndes Bancshares, Inc. and CBC funding, go to www.cbcbank.com or go into one of the bank's branches.

©2011 Tomi Johnson. All rights reserved.